United States v. Freight Forwarder International, Inc.
44 F. Supp. 3d 1359
Ct. Intl. Trade2015Background
- The United States seeks a $10,000 penalty under 19 U.S.C. § 1641(b)(6) for transacting customs business without a broker’s license by Freight Forwarder International, Inc. (FFI).
- FFI did not hold a corporate customs broker license during June 2009–January 2010, though it sometimes invoiced importers for duties and fees.
- CBP issued a June 3, 2010 pre-penalty notice and August 25, 2010 final penalty of $10,000; petition for remission/mitigation denied in 2011.
- Plaintiff alleges FFI paid duties/fees for 19 entries and invoiced some importers, indicating customs brokerage activity.
- FFI maintained in-house customs broker services and held at least one licensed employee but no corporate license.
- Defendant defaulted after not answering; Clerk entered default on August 18, 2014; court grants default judgment for $10,000 plus interest and costs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FFI transacted customs business without a license | FFI conducted customs business without a license | FFI did not hold corporate license but may rely on in-house broker employee | Yes; violation established |
| Whether CBP compliance procedures were properly followed | Procedures in 1641(d)(2)(A) were exhausted and proper notices given | Not applicable due to default | Procedures satisfied |
| Whether default judgment for $10,000 is warranted | Rule 55(b) supports $10,000 per violation, with total cap discussed | Not applicable due to default | Granted for $10,000 penalty |
| Whether post-judgment interest and costs are recoverable | Statutory post-judgment interest and costs should follow | Not applicable due to default | Post-judgment interest and costs awarded |
Key Cases Cited
- Cement & Concrete Workers Dist. Council Welfare Fund v. Metro Found. Contractors Inc., 699 F.3d 230 (2d Cir. 2012) (default damages may be determined without mandatory hearing)
- Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61 (2d Cir. 1981) (default does not establish damages; court must assess liability and damages)
- Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155 (2d Cir. 1992) (entry of default does not automatically prove a valid legal action for damages)
- City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114 (2d Cir. 2011) (court must determine if complaint supports liability as a matter of law)